services programs of the different States would likely vary considerably because of the needs and resources-natural, institutional, and human-of each individual State and that a model State program was not feasible.

SCOPE OF THE PROPOSED LEGISLATION

The proposed legislation has as its stated purpose the stimulation of a wider diffusion and more effective application of science and technology in industry through a "national program of incentives and support for the several States individually and in cooperation with each other in their establishing and maintaining State and regional technical service programs. ****

In the legislation technical services are defined as "activities or programs designed to enable businesses and industries to acquire and use scientific and engineering information more effectively through such means as:

“(1) Analyzing problems of regions and industries to determine new opportunities for applying technology.

"(2) Preparing and dismantling technical reports, abstracts, computer tapes, microfilm, reviews, and similar scientific or engineering information, including the establishment of State or regional technical information centers for this purpose.

"(3) Providing a reference service to identify sources of engineering and other scientific expertise.

"(4) Sponsoring industrial workshops, seminars, training programs, extension courses, demonstrations, and field visits designed to encourage the more effective application of scientific and engineering information."

The legislation thus covers the technical information processing and dissemination components and some of the components of the application part of our research-economic development system. It should be stressed that the legislation does not cover research or that part of the system concerned with the creation of knowledge, nor does it cover the actual process of innovation. Rather, it is intended to strengthen those activities relating to the analysis, selection, and dissemination of potentially useful information and the placing of this information in the hands of some identified institution or person who could put it to profitable use. It would strengthen the institutions and processes of the States, regions, and localities for handling and applying information that already existsincluding information already selected and processed by the Federal programs but which requires local analysis, processing, and referral to local enterprises and establishments in order to benefit the States, regions, and localities. It should be mentioned that, for the most part, the cost of adapting the information to local uses would, in general, be a very small part of the total cost of creating the information in the first place.

PERSONAL EVALUATION OF PROPOSED LEGISLATION

For several years, I have personally followed the activities of the U.S. Department of Commerce directed toward the development of an adequate program to stimulate the transfer of research results to the civilian economy. Some of the proposals of the Department have received opposition from a number of areas, and I am sure that the State Technical Services Act of 1965 has received similar criticism. In fact, I have personally heard some of these criticisms:

The proposed legislation is another attempt at Federal intervention in local and private affairs.

The proposed legislation provides Federal funds for activities which are strictly State and local business.

The proposed legislation provides for services which are being carried out efficiently and effectively by large, progressive industries; these industries have no need for such services.

The proposed legislation would support questionable industries which probably do not have the type of leadership necessary for successful growth.

The proposed legislation provides for certain activities which would be in conflict with and interfere with the normal functions of research establishments, management and engineering consultants, and the like.

I am sure, gentlemen, that you have heard all of these criticisms-and many

more.

On the other hand, for strictly logical reasons the proposed legislation has fundamental merit.

1. The Nation, including the States, regions, and local communities, must give substantially increased attention to the flow and utilization of the results of the vast research and development programs of the United States and of the world.— The great investment in research has produced results which could be of immense value to our society. The proposed legislation would attempt to stimulate activities to balance the research-economic development system, to feed the results of research and development into the society.

There can be but little argument about the imbalance of the research-economic development system. It has been widely recognized that many companies in the United States have failed because they have not used knowledge that is readily available. The proposed program would, hopefully, stimulate the use of such knowledge.

The Federal Government is now making available to the States, regions, and localities, as well as to private enterprise itself, information of great industrial implication. Positive mechanisms must be established if such information from the Federal research programs are to be assimilated at the State and local levels. As the various States, regions, and localities learn more about the Federal programs, these geographical and political entities will be able to assist the Federal Government in planning its activities in support of the total economic growth of the Nation-including the growth of the States, regions, and localities.

2. The steady reduction in farm employment and the leveling off of employment in the manufacturing industries, as well as the rapid growth of the population itself, demands the continued step-up of the economy. During recent years, great strides have been made in the creation of sophisticated service industries which are based upon complex new knowledge. In fact, the rapid introduction of new technology into industry is stepping up the rate of obsolescence of most industries. Thus, the security of existing industries, as well as the creation of new industries, requires the more rapid and more effective transfer of knowledge into practical uses.

3. A more balanced research-economic development system in the United States will result in improved education and research, at all levels and in all institutions. The universities will benefit from the flow of up-to-date knowledge into their education and research programs, the updating of their faculties, and a stronger interplay with industry and governmental agencies. The colleges will benefit in the same way, permitting them to train better students for advanced study and better teachers for the high schools and elementary schools. The junior colleges will benefit from the immediate availability of new knowledge, a stronger faculty, better trained students, and updated curriculums. The vocational schools will benefit through modern, up-to-date information to assist in the selection of areas of vocational study, the improvement of curriculums, and the updating of teachers.

Turning to the criticisms of the proposed legislation listed above, the following comments are provided in rebuttal :

The Federal Government has subsidized, to a major degree, research and development in the United States. The activities covered by the proposed legislation are a logical extension of the research and development functions into information and application areas.

Significant funding will be required by the different States to plan for and carry out adequate information and utilization programs, and the matching fund basis which has proved so effective in the Federal-State partnership in the field of agriculture would go a long way in stepping up the rate of development of such programs.

Because of the high and rising costs of research and development and of sophisticated research-related services, many companies cannot afford services of a type covered by the proposed legislation. These services could stimulate the growth of small, well-managed companies, as well as provide supplementary services to larger companies, even the largest.

The services proposed in the legislation should increase rather than decrease the clientele of research laboratories, management and engineering consultants, and the like, by assisting in the identification of problems and the location of competence for the solution of the problems. The increased clientele should result in two ways: more direct referrals to the research laboratories, management and engineering consultants, and the like, and the extension of information on the capabilities and possible contributions of such organizations.

CONCLUSIONS

In conclusion, gentlemen, after carefully scrutinizing the proposed legislation and weighing assets against deficits, I am convinced that my own State of Kansas would benefit substantially from the proposed State Technical Services Act of 1965, and that other States would similarly benefit. I believe that the role of the Department of Commerce outlined in the legislation is a reasonable extension of Federal activities in the stimulation of science and technology in an area that needs immediate attention. In fact, as a nation we cannot afford a delay in the strengthening of the process of general technology application. Thus, I heartily endorse the proposed legislation.

In closing, I should like to emphasize that the processing of knowledge and the utilization of knowledge are not the same processes as the creation of knowledge. We have a high order of competency in the creation of knowledge, but bold new concepts will be necessary to translate highly sophisticated scientific and technological information into practical, down-to-earth uses. Bold new pioneers can build economic empires out of knowledge created during the past decade; these pioneers must be persons with creative ability and competency of a high order. Provided that adequate institutions and alert innovation exist, such empires could spring up anywhere to the benefit of our beloved Nation and its people.

Senator NEUBERGER. This is a very excellent report, Dr. Barthel. I really have no questions, since you have covered it so thoroughly. Again, I like your specific references. I enjoyed your rebuttal of possible criticism of this program. I have a feeling that maybe some of that criticism is fading away, as nothing succeeds like success? Dr. BARTHEL. Yes. These were criticisms, in my opinion, of the bill and not of the process, and I believe they are fading away. I hope they are.

Senator NEUBERGER. Are you familiar with the bill that was introduced by Senator Scott, which is similar to this?

Dr. BARTHEL. I heard of the bill this morning for the first time and I did manage to look through it briefly.

Senator NEUBERGER. I think there is no conflict in the objectives of the two bills, and Senator Scott would say "amen" to all of your comments here. Senator Scott's bill alters some terminology; one uses "agency" rather than "institution." The bill refers a great deal to the universities and places where this work is going on.

We will be considering both of them in the committee, and your testimony will be very useful to us-and it is very specific.

Thank you very much.

Senator NEUBERGER. The next witness is Mr. George W. Hubley, Director of the State of Maryland Department of Economic Development. Is Mr. Hubley here?

(No response.)

Senator NEUBERGER. Perhaps he will be here a little later. We will hear then from Mr. Jean Paul Mather, executive vice president, University City Science Center, Philadelphia, Pa.

STATEMENT OF JEAN PAUL MATHER, EXECUTIVE VICE PRESIDENT, UNIVERSITY CITY SCIENCE CENTER, PHILADELPHIA, PA.

Senator NEUBERGER. We welcome you, Mr. Mather. Is the University City Science Center private?

Mr. MATHER. I think I can describe it briefly in my presentation, Madam Chairman.

Senator NEUBERGER. All right.

Mr. MATHER. I am filing this brief representing the science center and its wholly owned subsidiary corporation, the Science Research Institute, in support of the Technical Services Act of 1965.

The two organizations for which I serve as chief administrative officer are engaged in a long-range program for speeding up the timing and the quantity of transfer of technology between basic research discoveries or breakthroughs and their application in goods and services useful to our evolving economy. The University City Science Center is a nonprofit corporation composed of a consortium of universities, colleges, medical schools, and hospitals in Philadelphia and within a 90-mile radius of the center of the city. These nonprofit institutions have capitalized through stock subscriptions the nonprofit corporation known as the University City Science Center. This mechanism for raising local and regional seed money is possible in Pennsylvania under a State statute which allows nonprofit institutions to sell stock. They cannot declare dividends, but they can sell stock. Within the University City Science Center Corp. is a wholly owned subsidiary, the Science Research Institute, which can be used for rounding up both consulting and full-time staff from the member institutions to perform sponsored projects in the area of applied research and development. The University City Science Center Corp. will be the promotional, monitoring, and management institution. Designated by the Urban Redevelopment Authority as the redeveloper, this corporation will establish facilities and operations within a 26-acre urban tract adjacent to the University of Pennsylvania and Drexel Institute campuses in West Philadelphia.

The concept involves resident R. & D. facilities established by individual corporations through sale, lease, or lease-purchase of facilities. Other research institutes in a variety of disciplines should also be attracted to the center to carry on problem-oriented sponsored research for industry or government. Within the complex it is further planned to establish a Conference and Continuing Education Center to facilitate the handling of colloquia, seminars, and institutes for the training and "retreading" of scientists and engineers, for location of offices of professional societies, and for a meeting place for the catalytic exchange of ideas.

Comparable to the regional philosophy of the Technical Services Act of 1965, the Science Center concept in Philadelphia is a regional one involving a variety and number of basic research institutions and the problem-oriented industry and commerce of the entire Delaware Valley and Middle Atlantic States. This is an urban project, operating under a program of urban redevelopment as a means of bolstering the economy, developing new ideas and products, and providing new jobs in the science-directed industries of the future.

The officers and directors of the University City Science Center are vitally interested in the passage of the Technical Services Act of 1965. The interest stems from a close parallel between the act and our own objectives. Our program, instituted after over 3 years of careful planning and economic analysis, represents a locally organized vehicle for accomplishing a speedup in the transfer of technology in many of the precise ways and by the same means spelled out in the act.

If the Technical Services Act when passed, were administered from the Governor's office or through the department of commerce under

the Governor's office, the State of Pennsylvania has already available many of the mechanisms to be involved. The Governor's council of science and technology could very well serve as the advisory council described in section 10 of S. 949. Land grant and other institutions in the western sector of the State are ready and able to efficiently allocate resources in that area. And the Science Center in Philadelphia can serve as it already is serving to extend, diversify, and increase the services required in the Middle Atlantic megalopolis of which Philadelphia is a major part.

It is our firm belief that the objectives of this act represent a consistent approach to a joint Federal, State and local effort to improve and increase the transfer of science and engineering technology. With knowledge exploding as it is throughout the world, the United States has a vital stake in such an effort. If we are to maintain economic growth and progress in competition with the increasing R. & D. accomplishments of the Common Market countries, the Japanese and the Soviets, we will need to speed the development and use of our own knowledge industry with every conceivable means at hand.

Senator NEUBERGER. Mr. Mather, do you personally work with any of this? Are you an executive director?

Mr. MATHER. I am the chief administrative officer of both organizations, as we now begin our work. In other words, I am making the direct contacts with industry at this point. So that I have just started to employ my staff, within the Science Center. But I have established in each of the now 14 institutions who own stock a consulting committee of people who are interested in this transfer concept, and who will help serve as a screening committee, as we begin to come up with projects.

The direct answer to your question is that we have already landed one major research contract with a national pharmaceutical concern, and we are starting our first building this last week, for a million and a half dollars, some 90,000 square feet, of which 60 percent of it is rented by four major research contracts, before we begin the building.

Senator NEUBERGER. You referred to the increasing association with the Common Market, the Japanese and the Soviets. Would your in-dustries probably be interested in conversion to the metric system, as an aid for our international trade?

Mr. MATHER. This might improve communications. But I am more concerned, however, with the fact that the Common Market people and the Japanese, the Japanese in particular, are allocating without reservation, as you know, considerable sums of money and human resources to this R. & D. effort, and they have been very successful since 1946 in turning out quality products that are highly competitive with ours. And I believe that a lot of small and middle-sized and large industry has to awaken to this R. & D. catalytic action to keep in the competitive market.

I spent the 4 years before I came to Philadelphia in November organizing an industrial research park at Purdue, where a big midwestern engineering institution is involved in this same process of trying to provide, if you will, industrial extension, to bring corporations into the purview and into the geographic neighborhood of a big institution and then bring the brains together. The same problems are inherent there. The Midwest has done a lot of crying about Federal